TA Securities sees 12.5% upside for IOI Properties’ REIT arm, sets fair value at RM1.08

Friday 06 Nov 2026

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KUALA LUMPUR (Nov 6): TA Securities sees 12.5% upside for IOI Properties Group Bhd’s (KL:IOIPG) real estate investment trust (REIT) arm amid its attractive valuation relative to large peers.

The research house has assigned a fair value of RM1.08 per unit to IOIPG Malaysia REIT, compared with its initial public offering (IPO) of 96 sen. The valuation is based on a target yield of 6% and a calendar year 2027 distribution per unit (DPU) forecast of 6.47 sen.

The trust offers a forecast yield of 6.6% for the financial year ending Dec 31, 2027 (FY2027), higher than the 6.2% average for large mall REIT peers — Sunway REIT (KL:SUNREIT), IGB REIT (KL:IGBREIT), Pavilion REIT (KL:PAVREIT) and KLCCP Stapled Group (KL:KLCC).

“Our target yield is based on a 200-basis-point spread over our 10-year MGS (Malaysian Government Securities) target of 4%. This is in line with the five-year mean spread of the KL REIT Index over the 10-year MGS,” the house said in a note on Friday.

The trust also trades at a lower price-to-net asset value ratio of 1.1 times and price-earnings ratio of 16 times, compared with the respective peer averages of 1.35 times and 19.4 times.

TA Securities believes the valuation is supported by the quality of its assets, particularly IOI City Mall in Putrajaya, and the potential to expand its portfolio through acquisitions of properties owned by its sponsor.

On earnings, the research house forecasts DPU growth of about 4% annually in FY2028 and FY2029, supported by rental reversions of 5% to 6% at IOI City Mall, retail occupancy of about 97%, office occupancy approaching 90% and a blended net property income margin of about 68.5%.

IOIPG Malaysia REIT's initial portfolio comprises nine properties anchored by IOI City Mall, Malaysia's largest shopping mall, alongside six hotels operating under Marriott International's family of brands and two office properties. The portfolio has a combined value of RM7.66 billion.

The trust will carry debt of RM2.65 billion on its books upon listing and has a right of first refusal over select properties held by the sponsor, including IOI Mall Puchong, IOI Mall Damansara, IOI Mall Kulai and Palm Garden Hotel Putrajaya, providing a potential pipeline for future portfolio expansion.

IOIPG Malaysia REIT is scheduled to list on the Main Market of Bursa Malaysia on Nov 25. Its IPO is expected to raise RM2.1 billion for IOI Properties, the sponsor of the REIT, while the trust itself will not raise any capital from the offering.

The REIT is expected to have a market capitalisation of RM5.3 billion based on the IPO price.

Edited ByIsabelle Francis

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